Insight, analysis & opinion from Joe Paduda


Pennsylvania’s work comp formulary – the real story

There are honest disagreements about policy matters, and there is ignorance and fear-mongering.

That’s what’s happening in Pennsylvania’s House of Representatives, where a bill to mandate adoption of a formulary failed to pass yesterday.  It appears some politicians are being swayed by mischaracterizations by those who should know better, including “several unions joining with…trial lawyers.”

What’s especially disturbing is these unions and “plaintiff advocates” are claiming to defend injured workers, yet their opposition to this bill risks patient safety and does nothing to improve patient care.

(Note: this is NOT a slam against all plaintiff attorneys or organized labor)

One plaintiff lawyer characterized the bill as “just a cost-savings package for insurance companies.” That claim is blatantly false. Wording in the bill, SB 936, “expressly requires regulators to make sure any savings form a formulary are passed on to policyholders via reduced rate filings” (quote from WorkCompCentral)

Opponents of the bill say they’d support a bill that only addressed opioids.

This is nonsensical and naive at best.

Why are a comprehensive formulary and UR necessary and appropriate? 

Formularies have been in place in Medicare, Medicaid, Group and individual health insurance for decades. Workers’ comp PBMs use formularies and utilization review to ensure patients get the right drugs for their conditions, protect patients from potential ill effects from inappropriate medications, and streamline the approval process.

Second, it’s not just opioids that are potentially dangerous or deadly. Benzodiazepines, muscle relaxants, anti-depressants: all have significant risks, can be mis-used, and represent clear risks for patients.

Third, combining a formulary with utilization review is essential for patient safety. A formulary alone is just a set of guidelines; UR is how these guidelines are applied.

The compound drug scandal in Pennsylvania is prima facie evidence of the need for a strong formulary and tight utilization review. This from the Inquirer:

Three partners at [law firm Pond Lehocky] and its chief financial officer are majority owners of a mail-order pharmacy in the Philadelphia suburbs that has teamed up with a secretive network of doctors that prescribes unproven and exorbitantly priced pain creams to injured workers — some creams costing more than $4,000 per tube.

Pond Lehocky sends clients to preferred doctors and asks them to send those new patients to the law firm’s pharmacy, Workers First. The pharmacy then charges employers or their insurance companies for the workers’ pain medicine, sometimes at sky-high prices, records show. [emphasis added]

Formularies and UR are not the entire answer. In addition, Pennsylvania – and other states – should:

  • adopt mandatory reporting to and checking of a drug monitoring program (PDMP),
  • require a comprehensive approach to opioid prescribing (Washington State’s example is one of the better ones),
  • vigorously enforce drug distribution reporting requirements, and
  • demand manufacturers and distributors pay for the damage they have and continue to cause.

Note – as I’ve opined before, I have concerns with closed or binary formularies, and strongly believe payers and PBMs should have the flexibility to adapt formularies to match the needs, conditions, and co-morbidities of individual patients.

What does this mean?

We are doing everything we can to ensure patients get the drugs they need quickly, while protecting those patients from potentially dangerous medications.

It’s not about costs, it never was, and it never will be. 


8 thoughts on “Pennsylvania’s work comp formulary – the real story”

  1. I always find it amusing how worked up physicians, plaintiff attorneys, etc get about implementing treatment guidelines and drug formularies in WC. They act like it is a huge imposition on the rights of doctors and workers.

    Yet these same people have operated under treatment guidelines and drug formularies in group health, Medicare and Medicaid forever. These types of rules are nothing new.

    Those that would abuse the WC system don’t like rules that make it harder for them to do this. When someone objects to these bills…follow the money.

  2. Joe, I would add two more components to your recipe for state action on pharmacy costs ( which also contribute to safety ): eliminate physician dispensing of drugs with very limited exceptions, and payment for any and all topical compound medications ( which by definition are not FDA-approved). Some efforts in this direction have been undertaken, but not comprehensively or consistently.

  3. Great post, Joe. Agree completely with you and Mark. Formularies and treatment guidelines make workers’ comp more like group healthcare (where formularies and health policy guidelines provide clarity for providers to treat patients and get paid quickly). The reason they’re needed even more so in comp is not only to reduce system friction and ensure quality care, but because (unlike group health) the other limiting factor which we do not have is co-insurance (copays and deductables), hence we are ripe for excessive and often dangerous utilization. Twenty percent of opioids in the USA are paid for by comp payers (and 30% of artificial disc replacements), despite comp being only 1.5% of total medical costs. The result: Ruined lives. It’s tragic.

    1. Phil – thanks for the comment. Question – how did you come up with the 20 percent figure for opioid spend by workers’ comp?

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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